Debt restructuring deal agreed for Liberty Steel

The Liberty Steel group, which is owned by tycoon Sanjeev Gupta has reached an agreement in principle to restructure much of its debt for global operations, while negotiations continue on the debt of its European business.

The Group’s Restructuring and Transformation Committee (RTC) says it has signed a term sheet subject to contract on an agreement in principle for a debt restructuring with parties responsible for the main creditors of Greensill Capital (UK) Limited, Greensill Bank AG and Credit Suisse Asset Management (Switzerland) Limited.

Liberty and Greensill Bank as main creditors are in the process of negotiating a similar term sheet
for the debt restructuring of Liberty’s European steel businesses.

The agreement remains subject to documentation and the respective internal approvals. All parties will now work to prepare and execute the agreement, which is designed to provide Liberty with a platform to develop longer-term sustainable financing.

Under the agreement, the parties have adjourned the winding up petitions against Liberty entities.

Jeffrey Kabel, chief transformation officer at Liberty Steel Group, said: “After several months of negotiations, we have now reached an agreement in principle that will provide recovery for the creditors and will significantly deleverage and derisk Liberty.

“This is a major step forward in our restructuring and transformation and we will now work at pace with the
creditors to prepare and execute the agreement.”

Liberty Steel manufactures complex steel for the aerospace and energy sector and has operations across the country including in Rotherham, Stocksbridge, Scunthorpe, West Bromwich and Kidderminster.

In April the business, which is owned by Sanjeev Gupta’s Gupta Family Group Alliance (GFG), confirmed it would be cutting 207 jobs, as the business looked to recover from a turbulent period that began with the collapse of Greensill Capital, its key lender.

Greensill Bank is a subsidiary of Greensill Capital, which loaned money to businesses by buying their invoices at a discount, but it filed for insolvency in March last year after one of its main insurers declined to renew its cover.